1. Field of the Invention
This invention relates generally to manufacturing resource allocation, and more particularly, to risk management in the procurement of unfinished goods by estimation of component gating and shortage risk.
2. Description of the Related Art
An assemble-to-order (ATO) manufacturing process is one in which products are manufactured from raw components only as orders are received. While ATO processes are more efficient than manufacture-to-stock (MTS) operations, in which products are produced before demand is known, they are not without significant risks. If component availability is below what is required to meet product demand, then fulfillment of orders is either delayed or fails. Conversely, if excess component inventory remains after demand is met, the excess is either returned to the supplier, usually at a loss, or held until future need. Thus any component inventory that does not exactly meet demand incurs some financial loss for the manufacturer. Being able to predict the risk of component shortage for each component allows a manufacturer to make more informed business decisions.